Please Help Vanguard Taxable Account Asset Allocation

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BogleBulldawg
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Please Help Vanguard Taxable Account Asset Allocation

Post by BogleBulldawg » Sat Aug 01, 2020 5:34 pm

Hi, I am here to try to make my asset allocation in our taxable account improved. I would like to focus on the Vanguard allocation in this taxable account here and will provide some background info/thoughts that hopefully are helpful:

The reason for the post is to quickly grow, as safely as reasonably possible, a taxable (accessible) account for home purchase use and/or other necessities. I know some will say that since it is for a future home purpose should have some safety, however I think we need to be aggressive because the average home price where we live is somewhere between 1.2M to 1.6M. Am thinking about making an offer on the HOA home we are renting as soon as we can since it has more square footage and a nice backyard patio in a nice part of town, the HOA fee is $500-$550 month though I believe, which is obviously a hamper to price appreciation and a lost cost over years and years of payment. It seems like the only option to get lots of square footage and a nice backyard in a community/neighborhood that we like though.

Quick background info:

-36 years old, father of 2 amazing boys, 6 months and 3 years and a wonderful wife.

-Our net Worth 400-430k. Diversified in retirement accounts, the Vanguard taxable account and a few brokerage accounts as well as a few other assets. I can create a separate post to look at the whole ball of wax another time. I feel the allocation is diversified with some aggressive assets such as cryptocurrency and others that are maybe too safe like bonds and TIPS which are in the taxable account below. For now I want to focus on the above taxable account as a first step without looking at everything.

-MFJ filing status
-Work in healthcare as a provider. Entered workforce approx. 3 years ago after training for 11 years after college.
-Have been doing remote/tele locums work for past 6 months (approx. 10-12k monthly pre-tax on 1099), will be employed in position making 2x what I have been making soon (begin end of this month). I hope to enjoy and stay with this position that I am starting for as long as possible.
-Family just moved to California and we are renting in a higher rent area for quality of life and for our children in order to be a part of the community here
-Even though feel like wife and I have always tried to be frugal, and we have always read FIRE material such as Mr. Money Mustache as well as employed many of his philosophies to varying degrees, last night I read some of the Asset Allocation posts here from people in their 20s through 40s and definitely felt disappointed in the amount we have saved.



Vanguard Taxable Account:

We started this account in early to mid 2018 I believe and were DCA'ing a few thousand dollars or so every month using a portfolio with the 7-8 allocations below. At some point we might have added the BWX fund or it may have been an initial component (apologies for not remembering). The goal was to rebalance every so often (maybe every quarter or so), however as you can see there has been some drift, particularly from the Vanguard Energy Fund, which has done quite poorly since we've had the account.

The account seemed to peak around 180k at some point, however has been flat overall based upon the cost basis, which seems like a disappointment based upon our goal.

-Should we stick to the plan and rebalance? Or is it more in line with our goals to shift to equities for growth as our goal is faster growth, as safely as reasonably as we are reaching our late 30's and want to have a larger account for our goals. I think the allocation is too conservative? Especially considering I have an interest in rapid growth and at times am brave with investing such as with holding cryptocurrency, etc. That being said, did the allocation protect us during the recent dive? I have not really determined if it did or not, and if so... should be a good time to reallocate per the initial plan, or reallocate into a better allocation?

Total value: 163,000

VFIAX (500 Index) 18.0%
VEMAX (Emerging Markets) 14.2%
VGENX (Energy Fund) 8.49%
VIPSX (TIPS) 14.5%
VGSLX (Real Estate) 13.1%
VSIAX (Small Cap) 11.2%
VVIAX (Value Index) 12.7%
BWX (Spder Bloomberg International Treasury Bond ETF) 7.65%


Thank you in advance for your perspectives, I am always trying to learn and think about things in a new way. I am more of a gut and fly by the seat guy, however always benefit from the perspective of people who are strong at planning.

annu
Posts: 746
Joined: Mon Nov 04, 2019 7:55 pm

Re: Please Help Vanguard Taxable Account Asset Allocation

Post by annu » Sat Aug 01, 2020 6:58 pm

My recommendation, keep this mineybaccessible for home purchase, so less risk, with the new paycheck, 2x of what you get right now invest 100% of additional into aggressive strategies if that is what you want.


One of my close friends was big into growth/yield., and was not since May, but is again since this Friday, I feel he is always chasing yield but no one knows if it will really work.

I do VEMAX and VWO, but pair them with vfwax(allnworld developed) and vxus.

Also REITs is not same as real estate. I like real estate, so if you do as well, then buying properties, single family, multi family or commercial is the way to go, reits are more like buying stocks of companies involved in RE, they do pay high dividends though, so having in taxeable probably not a great idea.

Since you have sp500, I have total stock, but i only do sp600 based small cap with it. Value especially yield wise has been lagging for a while, so if you want yield, will probably avoid this.

Also you will be in high tax bracket, CA has a very decent tax exempt Muni bond fund, I will recommend that to consider as well.
I have had vwitx, the intermediate tax exempt muni funds and has done well.

livesoft
Posts: 72572
Joined: Thu Mar 01, 2007 8:00 pm

Re: Please Help Vanguard Taxable Account Asset Allocation

Post by livesoft » Sat Aug 01, 2020 7:01 pm

Looks terribly complicated. Why so many funds when one or two will do?

If you have any losses, sell those funds tomorrow. For example, VSIAX, VGSLX, VGENX, VEMAX are all probably underwater. If you sell those what are the dollar amounts of the net losses?

You can use the money to buy something like VFIAX which is generally tax-efficient unlike the tickers I told you to sell at a loss.

Since you are now in California, consider a tax-exempt California muni bond fund, but I'm sure there are other opinions on that.
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pkcrafter
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Re: Please Help Vanguard Taxable Account Asset Allocation

Post by pkcrafter » Sat Aug 01, 2020 7:05 pm

Welcome to the forum,

#1
I am more of a gut and fly by the seat guy, however always benefit from the perspective of people who are strong at planning.
You must develop a plan/strategy that includes long term investing, short term goals, daily living expenses, emergency fund. Count all retirement assets as one unified portfolio.

https://www.bogleheads.org/wiki/Financial_planning
https://www.bogleheads.org/wiki/Investm ... _statement

#2
The reason for the post is to quickly grow, as safely as reasonably possible, a taxable (accessible) account for home purchase use and/or other necessities. I know some will say that since it is for a future home purpose should have some safety, however I think we need to be aggressive because the average home price where we live is somewhere between 1.2M to 1.6M.
Yep, you are correct--money needed in a short time should not be in the market. Just be aware that if you are going to be aggressive with house money, you are taking a big risk. You may lose some of it and not be able to buy the house you want or not be able to buy any house for quite some time.

https://www.bogleheads.org/w/index.php? ... arch&go=Go

#3
VFIAX (500 Index) 18.0%
VEMAX (Emerging Markets) 14.2%
VGENX (Energy Fund) 8.49%
VIPSX (TIPS) 14.5%
VGSLX (Real Estate) 13.1%
VSIAX (Small Cap) 11.2%
VVIAX (Value Index) 12.7%
BWX (Spder Bloomberg International Treasury Bond ETF) 7.65%
https://www.bogleheads.org/wiki/Tax-eff ... _placement


Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

Topic Author
BogleBulldawg
Posts: 10
Joined: Sat Aug 01, 2020 4:37 pm

Re: Please Help Vanguard Taxable Account Asset Allocation

Post by BogleBulldawg » Sat Aug 01, 2020 7:16 pm

annu wrote:
Sat Aug 01, 2020 6:58 pm
My recommendation, keep this mineybaccessible for home purchase, so less risk, with the new paycheck, 2x of what you get right now invest 100% of additional into aggressive strategies if that is what you want.


One of my close friends was big into growth/yield., and was not since May, but is again since this Friday, I feel he is always chasing yield but no one knows if it will really work.

I do VEMAX and VWO, but pair them with vfwax(allnworld developed) and vxus.

Also REITs is not same as real estate. I like real estate, so if you do as well, then buying properties, single family, multi family or commercial is the way to go, reits are more like buying stocks of companies involved in RE, they do pay high dividends though, so having in taxeable probably not a great idea.

Since you have sp500, I have total stock, but i only do sp600 based small cap with it. Value especially yield wise has been lagging for a while, so if you want yield, will probably avoid this.

Also you will be in high tax bracket, CA has a very decent tax exempt Muni bond fund, I will recommend that to consider as well.
I have had vwitx, the intermediate tax exempt muni funds and has done well.
Thank you for these ideas Annu. Is the problem with mixing in taxable items like REIT and international bond fund that they get taxed more frequently? IE every year and at time of sale? Therefore, not good for growth? Thanks for explaining to someone first learning about asset placement.

I do think I need to reallocate here based on your response and another one that followed. Probably should simplify into about 2 or 3 funds and get rid of the REIT, bond, and TIPS?

Topic Author
BogleBulldawg
Posts: 10
Joined: Sat Aug 01, 2020 4:37 pm

Re: Please Help Vanguard Taxable Account Asset Allocation

Post by BogleBulldawg » Sat Aug 01, 2020 7:20 pm

livesoft wrote:
Sat Aug 01, 2020 7:01 pm
Looks terribly complicated. Why so many funds when one or two will do?

If you have any losses, sell those funds tomorrow. For example, VSIAX, VGSLX, VGENX, VEMAX are all probably underwater. If you sell those what are the dollar amounts of the net losses?

You can use the money to buy something like VFIAX which is generally tax-efficient unlike the tickers I told you to sell at a loss.

Since you are now in California, consider a tax-exempt California muni bond fund, but I'm sure there are other opinions on that.
Thank you Livesoft, I concur that it seems a little overcomplicated. When I initially read about this strategy, the rebalancing mechanism was supposed to make it like a symphony, automatically buying low and selling high...

Quick question, if I sell the losers, what is the plan? To sell some winners with it to rebalance? Or just sell to close them out because they are bad holdings?

Topic Author
BogleBulldawg
Posts: 10
Joined: Sat Aug 01, 2020 4:37 pm

Re: Please Help Vanguard Taxable Account Asset Allocation

Post by BogleBulldawg » Sat Aug 01, 2020 7:23 pm

pkcrafter wrote:
Sat Aug 01, 2020 7:05 pm
Welcome to the forum,

#1
I am more of a gut and fly by the seat guy, however always benefit from the perspective of people who are strong at planning.
You must develop a plan/strategy that includes long term investing, short term goals, daily living expenses, emergency fund. Count all retirement assets as one unified portfolio.

https://www.bogleheads.org/wiki/Financial_planning
https://www.bogleheads.org/wiki/Investm ... _statement

#2
The reason for the post is to quickly grow, as safely as reasonably possible, a taxable (accessible) account for home purchase use and/or other necessities. I know some will say that since it is for a future home purpose should have some safety, however I think we need to be aggressive because the average home price where we live is somewhere between 1.2M to 1.6M.
Yep, you are correct--money needed in a short time should not be in the market. Just be aware that if you are going to be aggressive with house money, you are taking a big risk. You may lose some of it and not be able to buy the house you want or not be able to buy any house for quite some time.

https://www.bogleheads.org/w/index.php? ... arch&go=Go

#3
VFIAX (500 Index) 18.0%
VEMAX (Emerging Markets) 14.2%
VGENX (Energy Fund) 8.49%
VIPSX (TIPS) 14.5%
VGSLX (Real Estate) 13.1%
VSIAX (Small Cap) 11.2%
VVIAX (Value Index) 12.7%
BWX (Spder Bloomberg International Treasury Bond ETF) 7.65%
https://www.bogleheads.org/wiki/Tax-eff ... _placement


Paul

Thank you Paul. There is a lot to think about for me and to digest. I confess that I am not a great planner as far as forgetting stuff, but I am a quick learner and I enjoy learning about the market. I will plan to visit these links and think about the points in them. I think if I could stick to a plan, even if complicated it will be a very good thing. Breaking things down as in your first paragraph will be important. My wife is a good household budgeter but I think we could be better about financial planning into different buckets and planning those out better, ie long term, short term, etc. I will have to make a separate post with the whole ball of wax, however it is probably even more complicated to look out. I think I enjoy diversifying but I need to make sure my asset allocations make sense, which is the whole gist of this first post, the asset allocations within the taxable account that we have.

Thank you again!

Topic Author
BogleBulldawg
Posts: 10
Joined: Sat Aug 01, 2020 4:37 pm

Re: Please Help Vanguard Taxable Account Asset Allocation

Post by BogleBulldawg » Sat Aug 01, 2020 7:26 pm

annu wrote:
Sat Aug 01, 2020 6:58 pm
My recommendation, keep this mineybaccessible for home purchase, so less risk, with the new paycheck, 2x of what you get right now invest 100% of additional into aggressive strategies if that is what you want.


One of my close friends was big into growth/yield., and was not since May, but is again since this Friday, I feel he is always chasing yield but no one knows if it will really work.

I do VEMAX and VWO, but pair them with vfwax(allnworld developed) and vxus.

Also REITs is not same as real estate. I like real estate, so if you do as well, then buying properties, single family, multi family or commercial is the way to go, reits are more like buying stocks of companies involved in RE, they do pay high dividends though, so having in taxeable probably not a great idea.

Since you have sp500, I have total stock, but i only do sp600 based small cap with it. Value especially yield wise has been lagging for a while, so if you want yield, will probably avoid this.

Also you will be in high tax bracket, CA has a very decent tax exempt Muni bond fund, I will recommend that to consider as well.
I have had vwitx, the intermediate tax exempt muni funds and has done well.
Forgot to ask for your and others opinions on this:

I think we can invest 100% of the additional income, though what percent should I put into each bucket: 100% short term goal for taxable account for possible house and other accessible cash or 50/50 taxable and retirement accounts, 80/20, 70/30? I do not know what makes the most sense.

There is no match I don't believe for the 401k for the new employer, but I believe I need to max out my retirement accounts each year if possible since I am 36 and no longer a spring chicken. Wish I had done that more consistently when I was younger, though I think being in training for a long time led to complacency, probably could have been more persistent on my Roth account instead of an intermittent investor.

Hope this makes sense and thanks for the advice.

Topic Author
BogleBulldawg
Posts: 10
Joined: Sat Aug 01, 2020 4:37 pm

Re: Please Help Vanguard Taxable Account Asset Allocation

Post by BogleBulldawg » Sat Aug 01, 2020 7:34 pm

livesoft wrote:
Sat Aug 01, 2020 7:01 pm
Looks terribly complicated. Why so many funds when one or two will do?

If you have any losses, sell those funds tomorrow. For example, VSIAX, VGSLX, VGENX, VEMAX are all probably underwater. If you sell those what are the dollar amounts of the net losses?

You can use the money to buy something like VFIAX which is generally tax-efficient unlike the tickers I told you to sell at a loss.

Since you are now in California, consider a tax-exempt California muni bond fund, but I'm sure there are other opinions on that.
VSIAX short term loss $-173, long term $-3,105
VGSLX short term loss -$14, long term -$199
VGENX short term loss -$582, long term -7,574
VEMAX short term gain $42, long term $655.20

VIPSX (tips) short term gain $124, long term gain $2,279



This account feels like a mess but the idea was to rebalance. Does any boglehead or investor out there play contrarian and think the asset allocation is OK if I go ahead and use the rebalance mechanism. Or should I consider rebalancing into a different allocation, keeping some of the players I currently have and getting rid of others, getting into a more appropriate allocation for the goal?

I am honestly confused if I was way off base, or just disappointed the account hasn't grown much yet now that I am standing in the middle of the river with the allocation shift/balance shift.

Wish I had just gone 100% equities VTSAX initially TBH but thought the rebalancing thing and diversifying thing seemed smart, now having doubts... Any contrarian opinions helpful and would be valued as well.

Thanks- Confused Bulldawg

livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: Please Help Vanguard Taxable Account Asset Allocation

Post by livesoft » Sat Aug 01, 2020 7:49 pm

I think you are were way off base to begin with because of the tax ramifications. Your portfolio was not tax efficient and any perceived gains from rebalancing and what not would be eaten up by higher taxes. And now that you are in California, I think it gets worse.

You asked what the plan was. I suggested you invest in only VFIAX and a Vanguard California tax-exempt muni bond fund. So when you sell all those turds that I suggested you sell, take the money and buy VFIAX and that bond fund. You can rebalance between those two and your treasury funds. Done.
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pkcrafter
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Re: Please Help Vanguard Taxable Account Asset Allocation

Post by pkcrafter » Sat Aug 01, 2020 8:11 pm

Thank you Paul. There is a lot to think about for me and to digest. I confess that I am not a great planner as far as forgetting stuff, but I am a quick learner and I enjoy learning about the market. I will plan to visit these links and think about the points in them. I think if I could stick to a plan, even if complicated it will be a very good thing.

Ok, read the links and remember, investing really is not complicated--keep it simple.



Breaking things down as in your first paragraph will be important. My wife is a good household budgeter but I think we could be better about financial planning into different buckets and planning those out better, ie long term, short term, etc. I will have to make a separate post with the whole ball of wax, however it is probably even more complicated to look out. I think I enjoy diversifying but I need to make sure my asset allocations make sense, which is the whole gist of this first post, the asset allocations within the taxable account that we have.

The taxable account, if just for a house, does need it's own AA (asset allocation).

You mentioned "buckets" so I'm providing a link to a discussion on the bucket strategy

viewtopic.php?f=1&t=302352


Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

looking
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Location: morgan hill ,ca

Re: Please Help Vanguard Taxable Account Asset Allocation

Post by looking » Sun Aug 02, 2020 4:49 pm

BogleBulldawg wrote:
Sat Aug 01, 2020 5:34 pm
Hi, I am here to try to make my asset allocation in our taxable account improved. I would like to focus on the Vanguard allocation in this taxable account here and will provide some background info/thoughts that hopefully are helpful:

The reason for the post is to quickly grow, as safely as reasonably possible, a taxable (accessible) account for home purchase use and/or other necessities. I know some will say that since it is for a future home purpose should have some safety, however I think we need to be aggressive because the average home price where we live is somewhere between 1.2M to 1.6M. Am thinking about making an offer on the HOA home we are renting as soon as we can since it has more square footage and a nice backyard patio in a nice part of town, the HOA fee is $500-$550 month though I believe, which is obviously a hamper to price appreciation and a lost cost over years and years of payment. It seems like the only option to get lots of square footage and a nice backyard in a community/neighborhood that we like though.

Quick background info:

-36 years old, father of 2 amazing boys, 6 months and 3 years and a wonderful wife.

-Our net Worth 400-430k. Diversified in retirement accounts, the Vanguard taxable account and a few brokerage accounts as well as a few other assets. I can create a separate post to look at the whole ball of wax another time. I feel the allocation is diversified with some aggressive assets such as cryptocurrency and others that are maybe too safe like bonds and TIPS which are in the taxable account below. For now I want to focus on the above taxable account as a first step without looking at everything.

-MFJ filing status
-Work in healthcare as a provider. Entered workforce approx. 3 years ago after training for 11 years after college.
-Have been doing remote/tele locums work for past 6 months (approx. 10-12k monthly pre-tax on 1099), will be employed in position making 2x what I have been making soon (begin end of this month). I hope to enjoy and stay with this position that I am starting for as long as possible.
-Family just moved to California and we are renting in a higher rent area for quality of life and for our children in order to be a part of the community here
-Even though feel like wife and I have always tried to be frugal, and we have always read FIRE material such as Mr. Money Mustache as well as employed many of his philosophies to varying degrees, last night I read some of the Asset Allocation posts here from people in their 20s through 40s and definitely felt disappointed in the amount we have saved.



Vanguard Taxable Account:

We started this account in early to mid 2018 I believe and were DCA'ing a few thousand dollars or so every month using a portfolio with the 7-8 allocations below. At some point we might have added the BWX fund or it may have been an initial component (apologies for not remembering). The goal was to rebalance every so often (maybe every quarter or so), however as you can see there has been some drift, particularly from the Vanguard Energy Fund, which has done quite poorly since we've had the account.

The account seemed to peak around 180k at some point, however has been flat overall based upon the cost basis, which seems like a disappointment based upon our goal.

-Should we stick to the plan and rebalance? Or is it more in line with our goals to shift to equities for growth as our goal is faster growth, as safely as reasonably as we are reaching our late 30's and want to have a larger account for our goals. I think the allocation is too conservative? Especially considering I have an interest in rapid growth and at times am brave with investing such as with holding cryptocurrency, etc. That being said, did the allocation protect us during the recent dive? I have not really determined if it did or not, and if so... should be a good time to reallocate per the initial plan, or reallocate into a better allocation?

Total value: 163,000

VFIAX (500 Index) 18.0%
VEMAX (Emerging Markets) 14.2%
VGENX (Energy Fund) 8.49%
VIPSX (TIPS) 14.5%
VGSLX (Real Estate) 13.1%
VSIAX (Small Cap) 11.2%
VVIAX (Value Index) 12.7%
BWX (Spder Bloomberg International Treasury Bond ETF) 7.65%


Thank you in advance for your perspectives, I am always trying to learn and think about things in a new way. I am more of a gut and fly by the seat guy, however always benefit from the perspective of people who are strong at planning.
[/quote

If i were you
I buy below;
money divides equally.

SP500
QQQ -heavy teck
Vug..large growth
Mgk large mega growth
Vgt--informatonteck
Vok mid cap
Vbk small cap

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Re: Please Help Vanguard Taxable Account Asset Allocation

Post by geerhardusvos » Sun Aug 02, 2020 6:03 pm

BogleBulldawg wrote:
Sat Aug 01, 2020 5:34 pm
Hi, I am here to try to make my asset allocation in our taxable account improved. I would like to focus on the Vanguard allocation in this taxable account here and will provide some background info/thoughts that hopefully are helpful:

The reason for the post is to quickly grow, as safely as reasonably possible, a taxable (accessible) account for home purchase use and/or other necessities. I know some will say that since it is for a future home purpose should have some safety, however I think we need to be aggressive because the average home price where we live is somewhere between 1.2M to 1.6M. Am thinking about making an offer on the HOA home we are renting as soon as we can since it has more square footage and a nice backyard patio in a nice part of town, the HOA fee is $500-$550 month though I believe, which is obviously a hamper to price appreciation and a lost cost over years and years of payment. It seems like the only option to get lots of square footage and a nice backyard in a community/neighborhood that we like though.

Quick background info:

-36 years old, father of 2 amazing boys, 6 months and 3 years and a wonderful wife.

-Our net Worth 400-430k. Diversified in retirement accounts, the Vanguard taxable account and a few brokerage accounts as well as a few other assets. I can create a separate post to look at the whole ball of wax another time. I feel the allocation is diversified with some aggressive assets such as cryptocurrency and others that are maybe too safe like bonds and TIPS which are in the taxable account below. For now I want to focus on the above taxable account as a first step without looking at everything.

-MFJ filing status
-Work in healthcare as a provider. Entered workforce approx. 3 years ago after training for 11 years after college.
-Have been doing remote/tele locums work for past 6 months (approx. 10-12k monthly pre-tax on 1099), will be employed in position making 2x what I have been making soon (begin end of this month). I hope to enjoy and stay with this position that I am starting for as long as possible.
-Family just moved to California and we are renting in a higher rent area for quality of life and for our children in order to be a part of the community here
-Even though feel like wife and I have always tried to be frugal, and we have always read FIRE material such as Mr. Money Mustache as well as employed many of his philosophies to varying degrees, last night I read some of the Asset Allocation posts here from people in their 20s through 40s and definitely felt disappointed in the amount we have saved.



Vanguard Taxable Account:

We started this account in early to mid 2018 I believe and were DCA'ing a few thousand dollars or so every month using a portfolio with the 7-8 allocations below. At some point we might have added the BWX fund or it may have been an initial component (apologies for not remembering). The goal was to rebalance every so often (maybe every quarter or so), however as you can see there has been some drift, particularly from the Vanguard Energy Fund, which has done quite poorly since we've had the account.

The account seemed to peak around 180k at some point, however has been flat overall based upon the cost basis, which seems like a disappointment based upon our goal.

-Should we stick to the plan and rebalance? Or is it more in line with our goals to shift to equities for growth as our goal is faster growth, as safely as reasonably as we are reaching our late 30's and want to have a larger account for our goals. I think the allocation is too conservative? Especially considering I have an interest in rapid growth and at times am brave with investing such as with holding cryptocurrency, etc. That being said, did the allocation protect us during the recent dive? I have not really determined if it did or not, and if so... should be a good time to reallocate per the initial plan, or reallocate into a better allocation?

Total value: 163,000

VFIAX (500 Index) 18.0%
VEMAX (Emerging Markets) 14.2%
VGENX (Energy Fund) 8.49%
VIPSX (TIPS) 14.5%
VGSLX (Real Estate) 13.1%
VSIAX (Small Cap) 11.2%
VVIAX (Value Index) 12.7%
BWX (Spder Bloomberg International Treasury Bond ETF) 7.65%


Thank you in advance for your perspectives, I am always trying to learn and think about things in a new way. I am more of a gut and fly by the seat guy, however always benefit from the perspective of people who are strong at planning.
Welcome to the forum! What’s your income? How much do you spend per year?

In my estimation you need to simplify, continue to aggressively invest, and stop thinking about buying a house. You are in no position to buy a $1M house. You should not try to invest in order to afford more house. Buy as little house as you can, or just continue to rent. Set a budget, invest everything else above the budget (try to invest 30-60% of your income), simplify your investments by investing in only a few total Stock market index funds. Use the links shared by the poster above to learn more about the Bogle approach and how to build a plan. Best wishes!
VTSAX and chill

Topic Author
BogleBulldawg
Posts: 10
Joined: Sat Aug 01, 2020 4:37 pm

Re: Please Help Vanguard Taxable Account Asset Allocation

Post by BogleBulldawg » Mon Aug 03, 2020 3:25 pm

geerhardusvos wrote:
Sun Aug 02, 2020 6:03 pm
BogleBulldawg wrote:
Sat Aug 01, 2020 5:34 pm
Hi, I am here to try to make my asset allocation in our taxable account improved. I would like to focus on the Vanguard allocation in this taxable account here and will provide some background info/thoughts that hopefully are helpful:

The reason for the post is to quickly grow, as safely as reasonably possible, a taxable (accessible) account for home purchase use and/or other necessities. I know some will say that since it is for a future home purpose should have some safety, however I think we need to be aggressive because the average home price where we live is somewhere between 1.2M to 1.6M. Am thinking about making an offer on the HOA home we are renting as soon as we can since it has more square footage and a nice backyard patio in a nice part of town, the HOA fee is $500-$550 month though I believe, which is obviously a hamper to price appreciation and a lost cost over years and years of payment. It seems like the only option to get lots of square footage and a nice backyard in a community/neighborhood that we like though.

Quick background info:

-36 years old, father of 2 amazing boys, 6 months and 3 years and a wonderful wife.

-Our net Worth 400-430k. Diversified in retirement accounts, the Vanguard taxable account and a few brokerage accounts as well as a few other assets. I can create a separate post to look at the whole ball of wax another time. I feel the allocation is diversified with some aggressive assets such as cryptocurrency and others that are maybe too safe like bonds and TIPS which are in the taxable account below. For now I want to focus on the above taxable account as a first step without looking at everything.

-MFJ filing status
-Work in healthcare as a provider. Entered workforce approx. 3 years ago after training for 11 years after college.
-Have been doing remote/tele locums work for past 6 months (approx. 10-12k monthly pre-tax on 1099), will be employed in position making 2x what I have been making soon (begin end of this month). I hope to enjoy and stay with this position that I am starting for as long as possible.
-Family just moved to California and we are renting in a higher rent area for quality of life and for our children in order to be a part of the community here
-Even though feel like wife and I have always tried to be frugal, and we have always read FIRE material such as Mr. Money Mustache as well as employed many of his philosophies to varying degrees, last night I read some of the Asset Allocation posts here from people in their 20s through 40s and definitely felt disappointed in the amount we have saved.



Vanguard Taxable Account:

We started this account in early to mid 2018 I believe and were DCA'ing a few thousand dollars or so every month using a portfolio with the 7-8 allocations below. At some point we might have added the BWX fund or it may have been an initial component (apologies for not remembering). The goal was to rebalance every so often (maybe every quarter or so), however as you can see there has been some drift, particularly from the Vanguard Energy Fund, which has done quite poorly since we've had the account.

The account seemed to peak around 180k at some point, however has been flat overall based upon the cost basis, which seems like a disappointment based upon our goal.

-Should we stick to the plan and rebalance? Or is it more in line with our goals to shift to equities for growth as our goal is faster growth, as safely as reasonably as we are reaching our late 30's and want to have a larger account for our goals. I think the allocation is too conservative? Especially considering I have an interest in rapid growth and at times am brave with investing such as with holding cryptocurrency, etc. That being said, did the allocation protect us during the recent dive? I have not really determined if it did or not, and if so... should be a good time to reallocate per the initial plan, or reallocate into a better allocation?

Total value: 163,000

VFIAX (500 Index) 18.0%
VEMAX (Emerging Markets) 14.2%
VGENX (Energy Fund) 8.49%
VIPSX (TIPS) 14.5%
VGSLX (Real Estate) 13.1%
VSIAX (Small Cap) 11.2%
VVIAX (Value Index) 12.7%
BWX (Spder Bloomberg International Treasury Bond ETF) 7.65%


Thank you in advance for your perspectives, I am always trying to learn and think about things in a new way. I am more of a gut and fly by the seat guy, however always benefit from the perspective of people who are strong at planning.
Welcome to the forum! What’s your income? How much do you spend per year?

In my estimation you need to simplify, continue to aggressively invest, and stop thinking about buying a house. You are in no position to buy a $1M house. You should not try to invest in order to afford more house. Buy as little house as you can, or just continue to rent. Set a budget, invest everything else above the budget (try to invest 30-60% of your income), simplify your investments by investing in only a few total Stock market index funds. Use the links shared by the poster above to learn more about the Bogle approach and how to build a plan. Best wishes!
Hi Geerhard,

Thank you for your advice, I agree. It is disappointing not to be in a good position to buy a home but it is what it is, we have so much to be thankful for.

My income doing locums has been 10-13k a month, or roughly 144k/annually, we have been buying our own insurance for $2200 a month for the family (high I know).

Starting at the end of the month, income will be 350-400k annually, with health benefits.

DW is looking for a job as an RN in California, which pays well, she likely would be able to earn up to $120-$160k annually at an employed position, with benefits.

Thank you again for the welcome and perspective.

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